Ford and GM can afford to put on a brave face 2 May 2023 Detroit carmakers say profit will hold up despite economic woes and costly electric makeovers, though markets look skeptical. Their reinventions carry risks, but 3.6 mln missing car sales thanks to Covid-era shortages mean their gas guzzlers enjoy plenty of unfulfilled demand.
Ending the retailers’ crisis has a high price tag 2 May 2023 Luring inflation-wary shoppers back to the high street won’t be cheap, executives at last week’s World Retail Congress said. Heavyweights like Zara owner Inditex, which has room to plough money into stores, stand to win big. H&M and others cutting to survive face a slow decline.
The game’s on, not over, for Activision Blizzard 1 May 2023 Microsoft has vowed to fight for its $69 bln takeover despite regulatory opposition. Even if the deal collapses, however, the developer behind “Call of Duty” would be armed with $15 bln of cash, including the break fee. It’s plenty of firepower to wage a stand-alone war.
India’s tycoons will weigh down Unilever’s basket 28 Apr 2023 The company’s $72 bln Indian unit is growing volume and gross margins in a sluggish market. It caps an excellent decade under outgoing CEO Sanjiv Mehta. He has set a high bar for his successor who will have to work harder as rivals from Reliance to Tata ramp up to win consumers.
Capital Calls: US GDP, Eli Lilly, EU budget 27 Apr 2023 Concise views on global finance: Consumer spending provided fragile support for the US economy in the first quarter. Meanwhile pharma group Eli Lilly is racing against rising obesity expectations, and the European Commission faces German hurdles to replacing its budget rules.
Meta is younger dog learning newer new tricks 26 Apr 2023 Mark Zuckerberg cut enough costs last quarter to bolster margins well past expectations, adding 12% to its $530 bln value in after-hours trading. That positions it nicely against competitors pivoting to AI. The issue is that Meta’s metaverse project doesn’t look as fresh.
TikTok ban is the least palatable of options 26 Apr 2023 Montana wants to block the Chinese-controlled short-form video service from operating in the state. The White House is mulling a similar strategy. But banning the app from 150 mln US phones is hard and legally fraught. Outside of a sale, a data privacy law is the best outcome.
Britain grabs mantle of chief Big Tech deal-slayer 26 Apr 2023 The UK competition watchdog vetoed Microsoft’s $69 bln purchase of “Call of Duty” owner Activision, rejecting the software giant’s promises. Takeovers by tech titans have fizzled under scrutiny from the EU and US. This decision makes it even harder to expand by acquisition.
Capital Calls: Plan C for Teck Resources 26 Apr 2023 Concise views on global finance: The Canadian miner withdrew a shareholder vote to split coal from copper as it looked set to fail. If a promised “simpler” breakup plan also falls short, the $24 bln takeover bid from Glencore may become more appealing.
Coinbase will force SEC to quit ghosting crypto 25 Apr 2023 It’s been eight months since Coinbase asked securities watchdogs to clarify how digital assets will be regulated. Now the world’s second-largest crypto exchange is suing for an answer. The legal battle will decide the fate of the trillion-dollar cryptocurrency industry in the US.
Icahn may fall short in quest of the holy Grail 21 Apr 2023 New rules in proxy contests haven’t helped activists in Disney or Salesforce. But with a concentrated shareholder base, they may embolden Carl Icahn as he agitates at Illumina, in the process of buying cancer detector Grail. The trouble is Icahn is pushing beyond the attainable.
Data-hungry AI models could help Reddit valuation 21 Apr 2023 The rise of artificial intelligence models like GPT-4 has turned social media posts into valuable commodities. Twitter paywalled that data last month, and Reddit plans to follow suit – which could help boost its valuation ahead of a public market debut.
Failed merger drifts have message in scrap heap 20 Apr 2023 Clothing retailer Lululemon may be mulling a sale of its smart fitness Mirror three years after buying it. Peloton has had a similar problem. Bold acquisitions that stray from a company’s knitting are exciting when funding is cheap but come at a high price when markets turn.
Bank chiefs move fluttering interest-rate needle 19 Apr 2023 Morgan Stanley’s James Gorman and JPMorgan’s Jamie Dimon both warned that sticky inflation may prompt the Fed to hike rates to 6%. While not a prediction, the figure exceeds what investors and the central bank itself expect. When CEOs sitting ringside weigh in, it pays to listen.
Netflix clears streaming hurdle, by a hair 18 Apr 2023 The video service added fewer subscribers than hoped, but has levers to pull to increase value, like $6 bln from a shared account crackdown in North America. They’re small gains in a tough market, but as rivals struggle to control spending, Netflix has a competitive edge.
Apple’s store push marks its big Indian wedding 18 Apr 2023 Dhol drums – a high-decibel feature of marriage celebrations – played in Mumbai as Tim Cook opened the company’s first store. A retail presence is mostly a symbolic gesture given India’s lower-middle income status. Yet selling more iPhones isn’t the only thing Cook has to gain.
Merck treats its migraine with half headache pill 17 Apr 2023 With its star cancer remedy close to going off patent, the pharma giant has shifted into digestive disease with an $11 bln bid for Prometheus. If the biotech’s drugs are approved, Merck will have a slice of a $49 bln sector. If not, the patent cliff will be even more precipitous.
Baijiu is fiery palate cleanser for Hong Kong IPOs 17 Apr 2023 A KKR-backed Chinese liquor group’s $800 mln listing is the city's largest this year. Beijing is directing funding onshore to strategic industries, and that will force more consumer companies to Hong Kong. Investors will be alert to see if that pushes more risk their way too.
Capital Calls: AI goes back to school 17 Apr 2023 Concise views on global finance: Chegg’s sagging shares perked up on news that the education software developer is working with ChatGPT maker OpenAI to create a safer automated tutor. For companies at risk of obsolescence, working with chatbots is a better bet than beating them.
Big Tech breakups: more antitrust than Alibaba 13 Apr 2023 The Chinese company’s six-way separation plans are renewing questions about the sprawl at Amazon, Alphabet and Meta. There’s less obvious strategic or financial upside to carving out AWS, YouTube or the metaverse. Competition authorities have their own agendas, however.